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Canada-based gold producer IAMGOLD Corporation (IAG - Snapshot Report) has suspended future dividend payments until further notice. The decision was taken to preserve its balance sheet in the current weak gold price environment.

Despite optimistic long-term prospects for gold, IAMGOLD is concerned about the lower gold price environment. Suspension of the dividend will help IAMGOLD conserve cash and utilize the same to take advantage of opportunities when the gold price environment improves.

IAMGOLD plans to consolidate its financial position and improve its return on capital through cost-cutting initiatives aimed at reducing mine operating costs, exploration expenditures and mine site and corporate general and administrative costs. The company launched a comprehensive $100 million cost reduction program on Mar 4, 2013, prior to the drop in the gold price.  

IAMGOLD is on track to meet the $100 million cost reduction target with 77% reduction already has been achieved. The company expects to meet the yearly cost reduction target by continuing prioritizing on cost reduction, disciplined capital allocation and cash preservation. The company maintains $750 million in undrawn unsecured credit facilities.

IAMGOLD is re-evaluating the capital expenditure plans, initiating programs to lower working capital, reviewing dividend policy, reassessing the life-of-mine plans and driving further cost reductions - all to create long-term value for the shareholders.

IAMGOLD reported a big drop in third-quarter 2013 earnings, due to lower prices for gold and higher operating costs. The company’s adjusted earnings (excluding one-time items) of 7 cents per share in the quarter dropped 56.3% from 16 cents reported in the prior-year quarter. However, earnings were ahead of the Zacks Consensus Estimate of 5 cents.

Net earnings plunged 68% year over year to $25.3 million or 7 cents per share in the quarter. Revenues fell 13% to $293.5 million from $336.2 million as lower gold prices more than offset by higher volume of sales.

IAMGOLD currently maintains a Zacks Rank #3 (Hold).

Some better-ranked stocks in the gold mining industry include Golden Star Resources, Ltd. (GSS - Snapshot Report), Pretium Resources Inc. (PVG - Snapshot Report) and AngloGold Ashanti Ltd. (AU - Snapshot Report). While Golden Star Resources carries a Zacks Rank #1 (Strong Buy), Pretium Resources and AngloGold Ashanti hold a Zacks Rank #2 (Buy).

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